A woman stands on a balcony, illuminated by the red neon hotel sign flashing beside her. She cries out to the night sky, in a voice throaty and impassioned, demanding to know why she is so haunted by her past. The aesthetic is pure Pedro Almodóvar. But the screen on which the image of the hotel is projected is not in a cinema: it's stretched across the stage of Edinburgh's dilapidated King's theatre. The actor, Laura Pizarro, stands behind it, at once separate from and enclosed by the picture.

It's easy to see why the Chilean company Teatro Cinema chose Alessandro Baricco's novella Sin Sangre (Without Blood) for their first fusion of live and celluloid arts: his tale of revenge and unexpected compassion is itself a film noir in poetic prose. What is more difficult to understand is why they would want to create this hybrid in the first place. It's not that film has no place on the stage; elsewhere in the international festival, the Wooster Group used it to fascinating effect to convey the sexual fantasies and inner complexities of the characters in Tennessee Williams' Vieux Carré. But where the Wooster Group achieve the best of both worlds, Teatro Cinema present the worst.

The technical ingenuity in what they do is undeniably immense. The five actors stand between two screens, positioned two metres apart, and must choreograph their movements immaculately to the images projected on them, or risk standing inside a table rather than beside it. But while the timing is impressive, it is also deadening, stripping the staging of animated life. And this remains true even as the director, Juan Carlos Zagal, and film-maker, Dauno Totoro, make cunning use of flashback and split-screens to reveal that Baricco's vengeful characters are equal parts victims and perpetrators of violence.

What is missing is the fleet-footedness of theatre, and particularly theatre's appeal to the imagination. There is nothing here for us to see but what we are shown: a car is a computer-generated image; a cafe is a complete picture of a cafe, not conjured up by a table and a couple of chairs. If this denial of an audience's contribution is distancing, then the company's use of masks is, ironically, even more so. The characters look like grotesques, even when their humanity is exposed. Far from complementing each other, the theatrical and cinematic tricks diminish the story, rather than enhance it.